First Take: Facebook takes on another transition as results surge

Apr. 23, 2014
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The Facebook logo. / Matt Rourke AP

by John Shinal, Special for USA TODAY

by John Shinal, Special for USA TODAY

SAN FRANCISCO - A year ago, Facebook's first 2013 earnings report proved to Wall Street that the company had managed the transition of its users from desktop software to mobile devices.

That's why its stock has risen 140 percent in the past 12 months.

This year, Facebook's first-quarter results show just how much profit the social network can extract from the exploding market for mobile advertising â?? especially brand-name video ads.

The amount was $885 million in net income, or 34 cents a share, compared to $312 million, or 12 cents a share a year ago.

Facebook also reported sales rose 72 percent, almost double the 38 percent growth rate of a year ago and higher than 63 percent rate in the fourth quarter of last year.

Now, with sales and profit surging, Facebook faces another transition as the cloud-based Internet turns more Web sites into mobile apps.

The company this month rolled out a separate messaging app for iPhone and iPad users, while changing the mix of messaging tools in its primary Facebook app.

The update, Facebook Version 9.0, became available in Apple's app store on April 17, which is when I downloaded it.

It has several new features designed to help companies create conversations around their so-called sponsored posts.

Those changes include replying directly to comments on Pages (or Facebook accounts held by companies, celebrities, artists, etc.) and, for iPad users, the ability to see more posts about trending topics in News Feeds.

Exploding sales of video News Feed ads are a big reason CEO Mark Zuckerberg and his team have been able to produce accelerating revenue growth over the past year.

The update also directs Facebook users who want to send a direct message to a friend onto a separate Messenger app, which became available in the app store on April 18.

On the consumer Web of the future, the winning tech companies will be those who can get the best ad rates from online marketers by providing the most detailed data on users of such stand-alone mobile apps.

In that market, Facebook has squared off against Google and other rivals, including Amazon, Apple and Twitter, all trying to grab the same brass ring.

As it charges headlong into the fray, Facebook takes with it a lot of positive financial momentum